Mumbai: Private equity firm Blackstone Group LP has agreed to buy a majority stake in auto parts maker Agile Electric Sub Assembly Pvt. Ltd for about $110 million (around 650 crore), the PE firm’s fourth buyout deal in India.

Blackstone will own 97.9% stake in Agile Electric, said Igarashi Motors India Ltd in a filing on Wednesday. Agile Electric owns over 60% stake in Igarashi Motors.

Blackstone purchased the stake from certain shareholders of Agile Electric Sub Assembly, including Hyderabad-based HBL Power Systems Ltd (which acquired Igarashi Motors in 2010) and Padmanaban Mukund, for about 332 crore, while the remaining amount will be invested in Agile and Igarashi Motors, said a person directly involved with the transaction who did not wish to be identified.

“Agile Electric is a leading firm in the DC motors space (DC motor is a mechanically-commutated electric motor powered from direct current). A car on average has 30-35 DC motors in it. The key attraction of this company is that 10-15 top original equipment makers or OEMs are their clients," said the person cited above.

The transaction also paves the way for an open offer of an additional 26% in Igarashi Motors. Blackstone declined to comment. A mail sent to Agile did not elicit any response.

Boutique investment bank MAPE Advisory Group Pvt. Ltd was the adviser to the seller.

Globally, Blackstone is known for taking controlling stakes. However, it has worked differently in India with a majority of its transactions in the country being minority stakes.

In India, Blackstone has invested over $2.9 billion across 27 transactions since its India head Akhil Gupta set up the PE firm’s operations here in 2005. Its buyout transactions in India include Intelenet Global services Pvt. Ltd, Gokaldas Exports Ltd and CMS Infosystems Pvt. Ltd.

The buyout transaction from Blackstone comes at a time when venture capital (VC) and PE deals in the country are slowing down in terms of volume. PE and VC deals fell by nearly 25% in the first six months. The period between January and June saw 279 venture capital and PE deals worth $5.2 billion, compared with 373 deals worth $4.4 billion last year, according to VCCEdge that tracks deals.

Investment bankers say there is a substantial interest in manufacturing segment and large PE investors are keenly looking at these opportunities. Last week, Citi Venture Capital International acquired a “substantial stake" for $56 million in Sansera Engineering Pvt. Ltd, which manufactures high-precision critical automotive engine and aerospace components.

According to K. Ramakrishnan, executive director, Spark Capital Advisors (I) Pvt. Ltd, an investment bank, there is a noticeable interest in buyout opportunities in the current market situation. “Earlier, buyouts were not possible. Now valuations have moderated and there are a lot of assets with investors keen on exits. That many of these investors have high stakes is helping in buyouts," he said.

Harish H.V., partner, India leadership team at Grant Thornton, expects more buyouts with corporates hiving-off their non-core assets and promoters giving control of their companies for numerous reasons. “The market is throwing up some very interesting opportunities. Promoters are giving up due to succession issues, there are instances of differences among promoters and some are just feeling tired of running a business."

My Reads Logout